U.S. stocks moved higher on Wednesday, recovering after weakness in the previous session following cautious comments from Federal Reserve Chair Jerome Powell.
At 09:32 ET (13:32 GMT), the Dow Jones Industrial Average rose 70 points, or 0.2%. The S&P 500 gained 8 points, or 0.1%, while the NASDAQ Composite added 60 points, or 0.3%.
Powell’s comments add caution
Markets stabilized after Tuesday’s drop, which ended a three-day streak of record highs. Powell said the Fed faces “no risk-free path” as it tries to control inflation while supporting the labor market.
Speaking in Rhode Island, Powell noted that U.S. growth has slowed this year and the labor market has cooled. However, inflation remains above the Fed’s 2% target. He emphasized a cautious, data-driven approach to rate cuts, warning against cutting too aggressively.
The Fed cut rates by 25 basis points last week. Markets expect at least two more cuts this year, but Powell’s remarks tempered hopes for faster easing.
Key data in focus
Investors now look ahead to the final Q2 GDP report due Thursday. Earlier estimates showed solid U.S. growth, though momentum is expected to slow amid sticky inflation and rising tariffs.
Friday brings the PCE inflation report, the Fed’s preferred measure. Headline inflation is expected to stay steady, while core inflation remains above 2%. This data will be key for the Fed’s rate outlook.
Q4 optimism from Bank of America
Bank of America analysts noted that history suggests strong equity performance in the final quarter. The S&P 500 has averaged a 2.84% Q4 gain, with positive returns in 74% of years. Analysts described Q4 as the “most wonderful time of the year” for stocks.
Corporate earnings lift sentiment
Shares of Micron Technology (NASDAQ: MU) jumped after the chipmaker reported strong growth, driven by AI-related demand.
Meanwhile, Alibaba (NYSE: BABA) gained attention after unveiling its most advanced AI model yet, Qwen3-Max, and pledging to boost investment in AI infrastructure.
Commodities update
Gold prices stayed near record highs as Powell’s comments fueled caution. Spot gold traded at $3,770.55 an ounce, while futures slipped 0.3% to $3,803.52.
Oil prices advanced after U.S. crude inventories fell, easing demand concerns. Brent futures rose 1.4% to $68.60 a barrel, while WTI crude gained 1.6% to $64.40. API data showed crude stocks dropped by 3.82 million barrels and gasoline inventories by 1.05 million. Official government data is due later Wednesday.
